The Responsibility of Policyholder Education
Everyone in the insurance industry admits that education of the policyholder about claims is a necessity. But what entities carry the responsibility for conducting the training?
A lifelong friend of mine who works in Florida for a city government suffered a workers' compensation injury last year. Fortunately, it wasn't an inherently serious situation; a torn index finger tendon on her dominant right hand.
I received a call from her to ask about what her rights were under the FL WC Act. She was concerned because the TPA administering the claim hadn't acted with alacrity in having her treated. Due to the treatment delay, the tendon curled up ultimately necessitating surgery, and donor site tendon transfer from her left ankle. This resulted in an extended period of TTD as well as a rather high percentage of PPD.
When she first called, I asked my friend what she knew about the WC process. She answered “nothing.” I then inquired if her employer ever conducted any employee meetings to discuss what to do if there was a WC injury. She replied “no.” The city for which she works is self-insured for WC coverage, and they use a TPA to adjust the claims. I asked if the TPA had ever sent anyone over to meet with the staff to go over WC processes and procedures. Again, the answer was negative.
I suppose I shouldn't have been nonplussed over the fact that no involved entity (the city, the TPA, the agent) had so much as given a thought to have a quarterly or bi-annual meeting to discuss WC. But I was still somewhat surprised. How are employees supposed to know about the tenets of filing a WC claim, and their rights under the law, as well as standard practice and procedure, unless someone tells them? In the case of my friend's employer, this “teaching opportunity” was lost.
Clearly, some knowledge about the WC process is helpful to any employee. Without any inkling of what rights exist under the law, the first thing an uninformed injured employee is likely to do is “lawyer up.” In my friend's case, she called me rather than going to an attorney. That was fortunate for her employer. Otherwise she told me she would have sought legal representation.
In the insurance industry, and particularly in the realm of WC, the insurance carrier has often shouldered the burden of training policyholders on the claims process. After all, the carrier is the one who is making the payments and it is in their best interests if they are dealing with an educated insurance consumer. However, in this example, there was no primary WC insurance company involved because the city is self-insured for WC.
The burden of educating the workforce, no matter how superficial, then devolves on one of three entities; the city, the TPA, and/or the agent. The city has no resident WC expert. The TPA was too busy to become involved in anything resembling pre-accident education. The agent was more concerned with having the E-1s completed timely and faxed to the TPA. On occasion, defense attorneys will provide these types of education meetings, but not unless they are asked. So a vacuum existed with no one rushing to fill the void. This equation usually results in a higher amount of litigated claims on average. If an employee feels abandoned about the WC process by their employer, they will logically seek assistance elsewhere in the form of an attorney. It is a foregone conclusion that litigated claims usually wind up costing more than non-litigated ones. So there is a cost to having a dearth of WC education for employees. I must conclude that in a case such as this, the pressure point winds up relating directly to the annual cost of WC benefits being paid by an employer. At some level, training will be deemed important.
Without the involvement of a primary insurance carrier, the education aspect of the city's WC risk management program was non-existent. Clearly an oversight that could have been remedied in a multitude of ways, if someone had bothered to analyze it. The problem is often that employee education about WC benefits rarely makes it onto a list of priorities for many employers, and so it was in the instant example.
I have heard from some employers that they are wary about having employee meetings about WC. The theory is that information will sensitize the work force to file fraudulent WC claims if they understand the process. This logic is inverted. The more employees understand about WC, the less they will be confused and frightened after an accident occurs. If they understand that indemnity rates are set by the state, and that medical treatment is fully covered under the WC Act, they will probably be less likely to seek legal representation when injured.
Obviously, employee training on the WC system should be done by a person who is familiar with the process, and can answer questions. That usually falls to the claims department of the insurance carrier or the TPA. Over the last few years, the former has office bound employees who may not even be in the same state as the risk making policyholder visits problematic , while the latter organizations usually do not want to do anything of this nature without being paid.
As usual, the first step in the right direction is admitting that education of the employee populace on the topic of WC is a worthy objective, and then sorting out who is best equipped to deliver it. A logical analysis should yield the proper resources to conduct as least annual meetings on this topic.
As to the peroration of my friend's claim, she was given a very high PPD rating by the treating physician, who was chosen by the employer. The TPA dilatorily requested an IME from another physician to specifically provide another PPD rating, with the expectation that it will be much lower. This claim isn't over by a long shot, and there may be an attorney involved at some point in the future. That's what can happen when there is no employee WC education, and the TPA handles the case with the speed of a tree. There's a lesson in there for the employers who care about keeping their WC costs down, and their employees at least marginally informed about the workers compensation arena.
About the Author:
John D'Alusio has over 30 years experience in P/C insurance with executive management positions in administration, field operations, and claim technical areas. Mr. D'Alusio has had many articles published in industry periodicals, and is also a contributing author to the LexisNexis published, “Complete Guide to Medicare Secondary Payer Compliance.” He writes a monthly column for Risk & Insurance Magazine and is a quarterly columnist for AMComp Magazine.
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